Energy and chemicals company OCI will become the largest shareholder of Bukwang Pharm, the drugmaker said.

The decision to sell Bukwang’s stock to OCI came even though the previous largest stakeholder, Chairman Kim Dong-yeon, and his eldest son and president, Kim Sang-hoon, had tight control over the drug company.

In a public filing on Tuesday, Bukwang said it would sell 7,730,334 shares held by Chairman Kim, the largest shareholder, and eight people related to Kim to OCI. The shares account for 21.6 percent of the total shares of Bukwang Pharm, and the stock sale amount is about 146.1 billion won ($122.6 million).

Through the stake transfer, OCI aims to expand its biopharmaceutical business. In addition, Bukwang and OCI will jointly participate in the management of Bukwang under the agreement between the shareholders.

What is noteworthy in the latest stake sale of Bukwang is that parts of the Bukwang shares moving to OCI are “in a state of deposit in court” as collateral for tax payment. Tax payment collateral is one of the conditions for paying inheritance or gift tax in multiple installments.

Under the stock sale agreement, Bukwang Chairman Kim and his family will pay 132.2 billion won worth of shares to OCI on Wednesday. The 731,496 shares worth 13.8 billion won under the court deposit will be paid to OCI on March 8.

Bukwang said it had built a cooperation relationship with OCI for several years.

In 2018, the two companies established a 50-50 joint venture, BNO Bio.

Bukwang Pharm CEO Yoo Hee-won is also leading BNO Bio. Bukwang Pharm President Kim Sang-hoon and OCI President Lee Woo-hyun are serving as registered executives of BNO Bio.

Through joint management with OCI, Bukwang will increase strategic investment, expand pipelines, and accelerate growth, the company said.

“OCI’s equity investment combines Bukwang’s new drug R&D and strategic investment capabilities with OCI’s know-how and financial power,” Bukwang Pharm CEO Yoo Hee-won said.

OCI, the new largest shareholder of Bukwang, is a developer and manufacturer of polysilicon, the key material for solar power generation.

The company has rich experience in the chemicals business, including agrochemicals and reagents. It is expanding its business portfolio to high value-added advanced materials such as semiconductors, secondary batteries, and eco-friendly materials.

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